The stablecoin market has achieved its highest capitalization level since April 2022, following eight months of continuous growth, as outlined in a recent report by cryptocurrency analytics platform CCData. By May 29, the stablecoin market cap had increased by 0.63% from the beginning of the month, reaching a total of $161 billion. This milestone signifies a significant recovery for stablecoins after a period of decline.

Decline in Overall Stablecoin Dominance

Despite the increase in market cap, the dominance of stablecoins in the wider cryptocurrency market has slightly decreased to 6.07%, down from 7% in March. This reduction reflects a broader recovery in the prices of major crypto assets, driven by positive market sentiment following the unexpected approval of a spot Ethereum ETF in the United States.

Among the top ten stablecoins, Athena USDe has notably distinguished itself with its market cap increasing for the fifth consecutive month. It witnessed an 11.6% surge to $2.61 billion, thanks to its expanded use as collateral for perpetual trading on Bybit. This consistent growth underscores the growing significance of Athena USDe in the decentralized finance (DeFi) ecosystem.

Performance Metrics of Leading Stablecoins

Tether (USDT), the largest stablecoin by market cap, reached an all-time high market cap of $111 billion by May 29, establishing its dominance with a 69.3% share in the stablecoin market. This outstanding performance underlines Tether's enduring appeal as a stable and trustworthy digital asset amid market uncertainties.

In a notable development, BlackRock’s tokenized fund token, BUIDL, surged by 19.6% to $448 million, becoming the largest tokenized treasury fund, surpassing Franklin Templeton's BENJI. BUIDL represents a stake in BlackRock's USD Institutional Digital Liquidity Fund and can be converted into USDC at a 1:1 ratio, providing investors with a new channel for liquidity and stability.

Circle’s USDC also witnessed a significant increase in market capitalization for the sixth consecutive month, reaching $32.6 billion in May. This upward trend aligns with rising demand, as USDC pairs recorded their highest monthly trading volume in March.

Decrease in Stablecoin Trading Volume on CEXs

Despite the overall growth in market caps, stablecoin trading volumes on centralized exchanges dropped to a monthly low of $829 billion on May 23. The report indicates that trading activity on centralized exchanges typically declines in the two months following the Bitcoin halving event, suggesting a cyclical pattern in market behavior.

The CCData report concludes that the total market capitalization of stablecoins has rebounded from the losses incurred after the collapse of the Terra Luna ecosystem and the significant depegging of the algorithmic stablecoin TerraClassicUSD (USTC). This event initiated a seventeen-month downtrend, but the recent growth signals a robust recovery and renewed confidence in stablecoins as a fundamental part of the cryptocurrency ecosystem.